Calcutta, July 30: Paints major ICI is divesting its 51 per cent stake in Indian Explosives to Orica — its Australian partner in the company which holds a 49 per cent at present — for an aggregate consideration of Rs 66.64 crore (Rs 87.11 per share).

At the same time, the board of Indian Explosives has decided to raise its holding in Initiating Explosives Systems India Ltd, its subsidiary, to 100 per cent by acquiring the 30 per cent stake that Ensign-Bickford Company of the US holds in it.

ICI had turned its explosives business into a joint venture with Orica in September 1999 by hiving it off into a separate company and divesting 49 per cent in it. ICI had a ‘put’ option for its residual stake in Indian Explosives, which it could exercise within three years from September 2001.

However, when ICI exercised its ‘put’ option calling Orica to take over its 76.5 lakh shares in the last financial year, the latter moved the Mumbai High Court seeking modification of the shareholders’ agreement, while alleging that ICI had not fulfilled its obligations.

ICI informed the stock exchanges today that it had reached an agreement with Orica Investment to sell its stake in Indian Explosives and to drop the suits pending in Bombay High Court. In the same notice, ICI also mentioned Indian Explosives’ move to acquire Ensign-Bickford’s 30 per cent stake in Initiating Explosives Systems.

The sale of ICI’s 51 per cent stake will be completed this year.

In another development, HDFC chairman Deepak S. Parekh has stepped down from the board of the paints major.

R. S. Karnad has replaced Parekh as an independent director on the ICI board.

ICI is close to the end of a radical restructuring of its business portfolio that began in 1998 with the company exiting joint ventures with Nalco Chemicals Company, USA and Zeneca, UK.

In 2001, ICI sold its polyurethane business to Huntsman Group of the US and its industrial paints business to Berger Paints. Late last year, ICI sold its catalyst business to the Johnson Matthey group.

Q1 sales, profit up

ICI today said its income from continuing businesses had increased 12 per cent, and operating profit, 10 per cent, in the April-June quarter compared with the corresponding period of last year. ICI earned Rs 157.16 crore in net sales during the quarter, and posted a net profit of Rs 7.65 crore, which translates into an earning per share of Rs 1.87.